TULSA, Okla., July 6 /PRNewswire-FirstCall/ -- Helmerich &
Payne, Inc. (NYSE: HP) announced today that the Company has entered
into agreements to build and operate seven additional FlexRigs.
These rigs will be built under multi-year term contracts for
four exploration and production companies, and will operate in the
U.S. with attractive dayrates and economic returns. The names
of the customers and other terms were not disclosed. All five
of the previously announced potential new builds will be used to
satisfy these long-term contracts. The first of these seven
rigs has begun mobilizing to its initial location in the Eagle Ford
shale, and the remaining six are scheduled for delivery at a rate
of approximately one per month through January 2011. The Company does not expect
these contracts to have a significant impact on its previously
announced fiscal 2010 capital expenditures estimate of $350 million. Since March 2005, the Company has now committed to
build a total of 150 new FlexRigs at a total cost of approximately
$2.4 billion.
President and CEO Hans Helmerich
commented, "We are encouraged by the renewed level of interest our
customers are showing in signing multi-year term contracts to build
and operate new FlexRigs at attractive dayrates and terms.
Reflecting on last week's forced exit from Venezuela, it is clear now that PDVSA was not
interested in both sides achieving commercial terms to return our
rigs to work. That approach only heightens concerns for our
oil field service peers contemplating their future there, as it
should.
Our future is better reflected in today's announcement of
additional new builds for paying customers under long-term
contract. Ironically, almost ten years ago, PDVSA was one of
our customers that saw the potential and expressed early interest
in the FlexRig capabilities. However, we never sent any
FlexRigs to Venezuela, and the 11
rigs that were seized last week were conventional rigs and not part
of our global FlexRig fleet. We depart with our heads held
high. We fulfilled all of our contractual obligations,
trained and employed thousands of Venezuelans and achieved an
outstanding long-term safety record. The loyalty of our
employees and many suppliers there will long be appreciated and
remembered."
At June 30, 2010, the Company's
U.S. land segment had 170 active rigs out of a total fleet of 215
rigs. Of the 45 idle rigs, only ten were FlexRigs, of which
nine already have signed contracts and are expected to return to
work over the next eight weeks. The 170 active rigs included
116 rigs under term contracts, four of which were new FlexRigs
waiting on customers that requested delivery delays. Delayed
FlexRigs do not generate revenue days and are not considered for
purposes of calculating and reporting rig utilization rates.
Helmerich & Payne, Inc. is primarily a contract drilling
company. As of July 6, 2010,
the Company's existing fleet included 215 U.S. land rigs, 28
international land rigs (excludes 11 nationalized rigs in
Venezuela), and nine offshore
platform rigs. In addition, the Company is scheduled to
complete another eight new H&P-designed and operated FlexRigs
by the end of January 2011.
Upon completion of these commitments, the Company's global
land fleet will include a total of 200 FlexRigs.
Statements in this release are "forward-looking statements"
within the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934 and are based on current expectations and
assumptions that are subject to risks and uncertainties. For
information regarding risks and uncertainties associated with the
Company's business, please refer to the "Risk Factors" and
"Management's Discussion & Analysis of Results of Operations
and Financial Condition" sections of the Company's SEC filings,
including but not limited to, its annual report on Form 10-K and
quarterly reports on Form 10-Q. As a result of these factors,
Helmerich & Payne, Inc.'s actual results may differ materially
from those indicated or implied by such forward-looking
statements.
*FlexRig® is a registered trademark of Helmerich & Payne,
Inc.
SOURCE Helmerich & Payne, Inc.